Lessons from Three of My Favorite Stock Picks

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I made some bold claims Wednesday during the Early Warning Summit 2022, my presentation with Luke Lango and Eric Fry. We discussed the factors that will lead to a stunning 2022 for the stock market and why now is the time for investors to position themselves for the coming strength. (If you missed it, you can watch the replay here.)

A person holds a phone with a stock chart visible on it with another chart visible on a computer nearby.

Source: Bro Crock / Shutterstock.com

We’re already off to a good start — with the S&P 500 registering its largest gain of the year from Monday through Wednesday, the Dow Jones Industrial Average hovering near the 36,000 level first topped in early November and the NASDAQ Composite close to its recent peak over 16,000 in late November.

Now, I’ve been described as a permabull, meaning I’m always bullish on stocks, which isn’t true. I simply follow my computer models. In times of economic growth, my models tend to be bullish. And in times of slowing growth or worse, my models alert me to get out.

The bottom line is that I believe in running the numbers — and in being guided by them. That’s key to your long-term success, as it removes your personal biases from the equation. Combining my quantitative or “top-down” approach with Luke’s and Eric’s more macro or “bottom-up” approach, we developed a unique portfolio of eight stocks just for 2022. It’s designed to make the most of the trends that will have the largest and most immediate impact on the coming year. (You still have time to catch the replay here.)

But this isn’t just a one-time “flash in the pan.” My quantitative system not only informed my predictions at the Early Warning Summit 2022 — it was also responsible for the greatest wins of my career.

The system behind my Portfolio Grader tool made me “one of the very first to recognize Google’s long-term potential, within months of its 2004 IPO,” as cited in MarketWatch.

And in recent years, it helped me pick stocks that went on to be the top performers among S&P 500 stocks. All of them reflect the same pattern you can use today to help predict future gains.

In April 2013, I picked Southwest Airlines (NYSE:LUV). Southwest is a company that’s best known for cheap flights, thanks to policies like no baggage fees and no assigned seats, which reduces boarding times. (As we all know, time is money, and that’s especially true if you’re an airline.)

In 2014, LUV closed out the year up +125%. By the time I recommended selling it in February 2016, we’d made far more on our position: +194%.

And in 2017, Align Technology (NASDAQ:ALGN) was the number-one stock for the year. ALGN might sound like an obscure stock. But when I mention its brand name Invisalign, that might sound more familiar. Yes, this is the company that’s helping move orthodontics from the old, cumbersome model of metal braces.

I recommended ALGN in August 2016, and 2017 was even better to ALGN: the stock gained +132% that year. By the time we cashed out our ALGN position in November 2018, we’d made an even better gain of +157%.

How? Well, these profits on all three stocks simply resulted from my following the cues of my Portfolio Grader.

Below is its current Report Card for ALGN:

There you see the eight business fundamentals I assess for any stock; as you can see, profitability is key.

In 2016, the best S&P 500 stock was NVIDIA Corporation (NASDAQ:NVDA), a leading maker of graphic processing units (GPUs) for computer gaming and the like. In fact, it invested the GPU back in 1999!

I recommended NVDA in May 2016, and in the previous quarter, the company had grown earnings by 38%. At $0.46 per share, versus expectations for just $0.31, NVDA had “beat the Street” by a whopping 48%.

The company continued to grow earnings throughout 2016, and ended up +207% for the year, earning it the top spot as the best performer in the S&P 500 that year! Meanwhile, I continued to recommend that NVDA position for quite some time. When we cashed it out in January 2019, we’d made even more: +274%.

In May 2019, we went back to the well for more profits in NVDA. At the time, Wall Street was looking for sales and earnings to drop 31.5% and 61.5% year-over-year, respectively. But I saw an opportunity in the company’s long-term potential as a leader in artificial intelligence (AI) and recommended folks grab shares at just $42.21 per share.

NVDA went on to become one of the top 5 performing stocks in the S&P 500 in 2020 and is on track to reach the top 5 again this year. The stock is up about 442% since 2020, but it is up more than 650% since I first recommended it.

Best Performer of 2022…

If there’s one thing I’ve learned in my investing career, it’s that you can’t go wrong if you stick with companies that “deliver the goods” with regard to earnings.

Now, as I look to the year ahead, I’ve done the hard research, run the numbers on key fundamental and quantitative factors, worked with my InvestorPlace colleagues Luke and Eric, and formed a view on what’s coming next.

Technologies like artificial intelligence, 5G, precision medicine, the Internet of Things (IoT), driverless cars, and the blockchain have been around in their early forms for years. Will 2022 finally be the year when these technologies converge to create massive increases in efficiency and convenience?

How will concerns about inflation, a market crash, government debt, and a pandemic impact the market?

And where should you invest your money — and where you shouldn’t — in the coming year?

Luke, Eric and I lay out our view in our Early Warning Summit 2022, and why we believe we’re about to witness one of the biggest stock booms in U.S. history.

Click here to watch the replay and see why Luke, Eric and I think stocks are a screaming buy now.

Sincerely,

P.S. Luke, Eric and I see a lot of great opportunities lining up for 2022. But you need to be VERY selective with your money moving forward given everything that’s happened in the world.

And you need to have a proven game plan in place for the moments when the markets get rocked.

We see big moves coming to the market in 2022, and we’ve created a unique approach to exploit these moves for big gains. We go over it in fine detail at our Early Warning Summit 2022.

Click here to watch the replay now.

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corporation (NVDA), Align Technology (ALGN)

Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.


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